1.1 Background AirAsia Berhad, is a Malaysian leading low-cost airline.

It was established with the dream of fulfilling flying possibility for everyone from all different standards of living, and social classes. It operates scheduled domestic and international flights and is Asia's largest low fare, no frills airline but since year 2001, AirAsia has promptly broken travel norms around the globe and has risen to become the worlds best. AirAsias route network that extent through more than 20 countries continues to overlay the way for low-cost aviation through their innovative solutions, efficient processes and a passionate approach to business. It is also the first airline in the region to implement fully ticketless travel and unassigned seats. However, as of 5 February 2009, AirAsia has implemented allocated seatings across all AirAsia flights, including in their sister airlines, Indonesia AirAsia and Thai AirAsia. Its main base is the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs at Suvarnabhumi Airport, Thailand and Soekarno-Hatta International Airport, Indonesia, respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is on the grounds of Kuala Lumpur International Airport in Sepang, Selangor. In 2010 Air Asia won an award for the world best low cost airline. Datuk Tony Fernandez was the entrepreneur that brought up AirAsia to be one of the award winning and largest low fare airlines that is currently well known for now in Asia. Since then it has been expanding up rapidly since the year 2001. Now AirAsia with a fleet of 72 aircrafts have been flying to over 61 domestic and international destinations with 108 routes, and furthermore it operates over 400 flights daily from hubs that are in Malaysia, Thailand, and in Indonesia. The airline was established in 1993 and started operations on 18 November 1996. It was originally founded by a government-owned conglomerate DRB-Hicom. On 2 December

2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit. This was after great deliberation as the initial offer was fifty sen. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1. Today, AirAsia has flown over more than 1 billion guests across the region and continues to create more extensive route network through its associate companies. The company AirAsia furthermore believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires a specific element of high efficiency in every part of their business. Through the corporate philosophy which stands that Now Everyone Can Fly, its very much clear that AirAsia has sparked a revolution by transporting more and more people all around the region. Through this method, everyone is deemed to be choosing AirAsia as their preferred choice of transport in order to fly to different countries all over the region. AirAsia methodology in creating what suits their customers best can see through their vision and mission statement. To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares is their vision and their mission is to be the best company to work for whereby employees are treated as part of a big family, create a globally recognized ASEAN brand, to attain the lowest cost so that everyone can fly with AirAsia, and maintain the highest quality product, embracing technology to reduce cost and enhance service levels(AirAsia Coorperate Profile). There are six key strategies that AirAsia had implemented to make them become a successful low fare models. Safety first is their first key strategy where they partner with the worlds most renowned maintenance providers and complying with the world airline

operations. Second is the high aircraft utilisation where they implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity. By providing guests the choice to customise services without compromising on the quality and services as well as making sure the processes are simple are their third and fourth key strategies. Besides that offering a wide and innovative range of distribution channels to make booking and travelling easier along with applying the point-to-point network keeps operations simple and costs low do also successfully make them the low fare models today.